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Renewed community confidence spurs Sault developers

With Algoma Steel on solid footing, city planners seeing more apartment rental units on the books
Don McConnell 2
City of Sault Ste. Marie planner Don McConnell is seeing a revitalization in the local rental apartment development market with shuttered school properties finding new repurposed uses. (Ian Ross photo)

The emergence of Algoma Steel from bankruptcy protection has kicked up the confidence of local developers, according to the City of Sault Ste. Marie's planning director.

Don McConnell estimates his department receives four to five applications monthly from developers looking to build rental apartment units, an activity that had basically flatlined during the three years that the steel producer was undergoing financial restructuring.

But through last summer and fall, as word spread that Sault Ste. Marie's biggest industrial player was finishing the process, a bunch of smart and savvy local developers, with a good handle on the market, saw an opportunity to fill a much-needed housing gap.

As the Sault's population ages, many seniors are looking to sell their homes and downsize.

The service industry to cater to these folks only figures to grow, and that necessitates the need for employers and the City of Sault Ste. Marie to aggressively recruit young people to relocate to the Sault.

"When you're talking to these companies, they're looking for anybody," said McConnell of the current labour crunch.

"Algoma Steel is looking to hire 800 people over the next two years."

An interesting development trend is the repurposing of former elementary and secondary schools into other uses. McConnell mentioned five former schools that have been converted, or are in the process of being converted, into apartment dwellings or for other community uses, such as a library.

"We've had phenomenal succss with old schools," he said, and it's something his department has been actively encouraging. Instead of being bulldozed or sitting vacant for years, developers are snapping up these still structurally sound buildings, which often become new homes for seniors who live in the neighbourhood or newcomers to the city.

"When people first come to a community, they don't buy a house. They live in an apartment to see if they like the community or their job, then they think about buying a house," he said.

To spur that activity, the city introduced a Rental Housing Incentive Program five years ago, essentially a municipal tax break with a rebate to developers of 100 per cent in the first year and graduating up to 25 per cent by the fourth year.

McConnell doesn't directly attribute the program to a developer's decision to build new units, but he believes it has played a factor in the number of planning applications he's seeing.

So far, city council has approved 11 projects for a total of 263 new apartment units, representing a total construction value of $28.9 million.

Across the street from a former secondary school, which is now seniors housing, the football field is the proposed site of a 90-unit apartment building.

In the downtown, a local developer looks to build an 103-unit apartment building on Pim Street, north of the Algonquin Hotel.

McConnell wonders how many more units could've been built had Algoma Steel's bankruptcy protection phase not cast a pall over the economy.

The incentive program was scheduled to end last August, but last September, council decided to extend its life for another two years.

In the city's north end, Great Northern Road continues to be the most noticeable area of commercial development in recent years.

New strip malls housing doctor's offices and medical services like pharmacies, orthopedic supplies and denturists have sprung up to be conveniently close to the new Sault Area Hospital, which employs 2,000.

But it's not been the greatest attracter of investment.

Wal-Mart, which has expanded from 110,000 square feet to 155,000 square feet, with the addition of a grocery store, and its Home Depot neighbour, continues to be a huge draw for shoppers. It's created a big box environment that other commercial establishments want to cozy up to.

Once-empty fields are gradually being infilled with fast-food outlets, convenience stores and gas stations.

The uptick in traffic in this business district is evident. The intersection of Great Northern and Second Line handles an estimated 50,000 vehicles daily.

And that's prime ground for one of the most anticipated developments this year, with the pending construction of the new Pino's grocery store near that corner.

The popular local grocer is proposing a 59,000-square-foot store, which is larger than his thriving east end store on Trunk Road.

It's a two-phase project, which will include an extra 16,000 square feet of retail space of yet-to-be-disclosed tenants on a land package of 8.2 acres.

McConnell said grocer-developer Ben Pino feels he can draw more customers from the city's west end.

On the municipal infrastructure side, the city will be reducing Bay Street, one of the city's main thoroughfares, from four lanes to two lanes this summer.

Bay Street is a gateway to the city for American tourists coming off the International Bridge.

It will still remain a one-way street, going from west to east, but the plan is to create a tree-lined boulevard with ample curb space for walking and bike lanes connecting to the Hub Trail system.

In 2018, the city issued 1,553 permits with a construction value of more than $93.8 million.

The biggest chunk of that was the $38.5 million spent in residential construction, with new homes, additions and apartments. Institutional-government spending was slightly more than $28 million, with the value of permits for new and expanded commercial construction coming in at $23.5 million. The value of permits for industrial construction was a paltry $3.7 million.

The value of permits posted during the sleepy month of January amounted to almost $1.35 million, most of it in the commercial category.